How are you going to save in 2013?

It seems whenever I put a little money away into a savings account or a secret stash at home some unexpected expense always seems to arise. Car repairs, home repairs and uncovered medical expenses can pop up at any time. Begrudgingly, I am forced to dig into what little savings I have or choose to add onto my already pumped up credit cards.

But I am optimistic. According to a new report from BMO Bank of Montreal, Canadians are planning to save on average about $9,859 this year. That’s an increase of $600 over the previous year.

And how do they intend to save? Well, the majority are using a Registered Retirement Savings Plan (RRSP), 63 per cent; chequing account, 57 per cent; Tax Free Savings Account (TFSA), 49 per cent; high-interest savings account, 29 per cent; and Guaranteed Investment Certificates (GICs), 25 per cent.

Ernie Johannson, Senior Vice President, Personal Banking, BMO, says it’s encouraging to see Canadians increasing their savings this year. “While it’s important to pay down debt – particularly high-interest debt – it’s essential that households build themselves a financial cushion as well, whether it be for retirement or other goals.”

And just what are Canadians saving for? Well, the report, conducted by Pollara, indicates the majority are saving for vacations and for purchasing luxury items, entertainment and hobbies. Retirement and emergency savings tied for second spot.

Other top things Canadians are saving for include home renovations (29 per cent); new vehicle (20 per cent); education (19 per cent); and a new home (15 per cent).

The report also found that men plan on saving a little bit more than their counterparts by hoping to stash away $11,631 compared to the ladies with $8,091.

And by province it appears that Albertans plan on saving the most with $18,035; followed by British Columbia, $11,109; Ontario, $10,465; Manitoba and Saskatchewan, $9702; Atlantic provinces, $6,698; and Quebec, $5,477.

It’s always nice to be able to put a little away for a rainy day however, the study found that only half of Canadians polled feel they are saving enough to meet their goals.

Some of the barriers to increased savings include high expenses (71 per cent); low income (65 per cent); and debt repayment (52 per cent). Now I can relate to that!